Amazon Not Slowed By Sales Taxes
It’s long been argued by retailers operating stores in states where Amazon.com doesn’t collect sales taxes that the e-tailing giant has an unfair advantage because consumers can see that with them they can save perhaps six or seven percent. But a funny thing has happened as more states work out deals for Amazon to collect sales taxes — the company continues to grow.
Now, it’s clear that Amazon recognizes that the company holds an advantage in places where it doesn’t collect taxes. It certainly helps explain why Amazon has repeatedly made deals with states to open distribution centers in exchange for putting off the date when it begins to collect taxes.
The most recent example is in Massachusetts where Amazon has reached agreement with the Commonwealth to add jobs and then collect taxes. This is true even though, as an Internet Retailer article points out, Amazon already has physical operations in Massachusetts (and therefore should be collecting sales tax) with Kiva, a company that manufactures robots for warehouse operations.
Amazon, according to The Wall Street Journal, currently collects sales taxes in eight states with plans to begin collecting in New Jersey and Virginia in addition to Massachusetts next year. It has also reached deals to begin collecting sales taxes in Indiana, Nevada, South Carolina and Tennessee in coming years.
- Amazon signs another tax deal – Internet Retailer
- Amazon.com will begin collecting taxes in Massachusetts, Governor Deval Patrick says – The Boston Globe (Tiered sub. model)
- Amazon, Massachusetts Strike Deal For Residents On Sales Tax – The Wall Street Journal (sub. required)
Why does Amazon continue to prosper in states after it begins collecting sales taxes? Do you think retailers in states who clamored for a level playing field are now benefiting as a result of Amazon collecting sales tax?